ACCT 212 Financial Accounting - ACCT 212 Week 8 Final Exam Summer 2020 GRADED A

(ACCT 212 Week 8 Final Exam Summer 2020) Question: (CO 3) Explain why adjusting entries are required at the end of each accounting period (15 points), and provide an example of a … journal entry for either the consumption of supplies or insurance (10 points). Question: (CO 2) If the two columns of a trial balance are equal, does it mean that there are no errors in the accounting records? Explain (15 points). If the totals of the trial balance columns do not equal, what are some corrective actions that might … taken to find the error (10 points)? Question: (CO 5) Internal control procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how separation of duties can satisfy the purpose of internal control (15 points), and (2) provide an example of how this control could … implemented (10 points). Question: (CO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the first in first out (FIFO) method is applied (15 points), and (2) provide an example of the impact that this method of inventory valuation will have on gross profit (10 points). Question: (CO 1) To evaluate the financial operation and health of a business, ratio analysis is used. (1) Provide the formula for the current ratio, and explain how it is computed (10 points) and (2) provide an example of how this ratio can be used in decision making in business (15 points). Question: (CO 6) BagODonuts Company bought a … delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles). BagODonuts’ accountant estimated that the truck’s residual value would be $2,400 at the end of its useful life. The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year. Calculate depreciation expense for the truck for each year (2010–2013) using the following. Straight-line method Double-declining balance method Units of production method (For units-of-production and double-declining balance, round to the nearest two decimals after each step of the calculation.) Which method best tracks the wear and tear on the van? Which method would BagODonuts prefer to use for income tax purposes? Explain in detail why BagODonuts prefers this method. Question: (CO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock. Preferred stock: 7%, par value $100 per share, 100,000 shares. Common stock: $1 par value, 500,000 shares. The following transactions occurred during the year. 1/19/12 Issued 100,000 shares of common stock for $17 cash per share. 1/31/12 Issued 3,000 shares of preferred stock for $115 cash per share. 11/1/12 Repurchased 30,000 shares of common stock for $22 cash per share. 12/1/12 Declared and paid a total dividend of $95,000. Required: 1. Prepare the journal entry for each transaction listed above. 2. In your own words, explain the main differences between common and preferred stock. 8. Question: (CO 5) Internal control procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions. Of the seven internal control procedures, list five of these controls, and describe how each procedure is implemented (6 points each with 3 points for listing and 3 points for a description). 9. Question: (CO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order. Account Balance Common stock $5,100 Accounts payable $4,400 Service revenue $17,100 Land $28,800 Note payable $9,500 Cash $5,200 Dividends $6,100 Utilities expense $2,100 Accounts receivable $10,600 Delivery expense $700 Retained earnings $25,600 Salary expense $8,200 Prepare the company’s trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter. For example, accounts receivable comes before land. List the expense with the largest balance first, the expense with the next largest balance second, and so on. 10. Question: (TCO 4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions: Journals – Jan. 2001 Purchases Supplier Date Received Quantity Unit Cost Amount Donna 01/10/01 110 12.00 1320.00 Thomas 01/15/01 160 14.00 2240.00 Cindy 01/18/01 150 15.00 2250.00 Sales Customer Date shipped Quantity Sel. Price Amount Norilene 01/16/01 200 25.00 5000.00 Calculate the ending inventory, using the perpetual inventory method: A. Using FIFO B. Using LIFO Using Average Cost Prepare the following statement Using FIFO LIFO Average Cost Sales Cost of Sales Gross Profit ACCT 212 Week 8 Final Exam Summer 2020